Saturday, May 12, 2012

All in it together

Once again the spotlight is on Greece.  Some of the coverage is excellent - up to a point. That point is when they stop at the Greek borders and forget this is a pan-European problem.

Let's face it. There is a lot wrong with the Greek state. Anyone who has had any dealings with their fabled bureaucracy will know the intense irritation, the queues, the inefficient systems and the general default level of unhelpfulness. They will also appreciate the kindness and frustration of the other Greeks who help you deal with it. It needs reform. The Greek people want it. There are also a number of, often severe, problems with the Greek domestic economy. But if this was solely a Greek crisis we would not be talking about Spain, Ireland, Portugal or Italy.

Commentators also point with some bafflement at the apparent contradiction of Greek public opinion wishing to stay in the Euro whilst rejecting the bailout terms. There is no contradiction here if you support the European Union yet think that the economic policies are, at best, counter-productive or, at worst, downright crazy. Why should there only be one model of political economy required for Euro membership - in perpetuity? Seen this way, the election results are perfectly coherent. They acknowledge the importance of Europe to Greece, they express support for the reform of the state, but they also display horror at a policy that is sucking demand out of the economy at an alarming rate, closing viable small businesses and collapsing living standards. Greece needs reform, but then so does the EU, especially when it comes to their ideological certainties about the macroeconomic policy of the Eurozone. It is that policy that is being rejected everywhere, not the European Union itself.

And not only is this crisis affecting all of Europe, so the economic policy being followed is not made domestically. It is decided elsewhere and being imposed on many other countries with the same political and economic results. It is a uniform pan-European policy.

The mainstream parties of the right and left are the ones responsible for implementation, so can anyone be in the slightest bit surprised that their support has collapsed? Do they really think that people will 'return to their senses' after their protest vote and fall in line behind austerity? If so, they don't get it. I cannot remember a time when politicians have been as remote from the lives of their electors and as cocooned against the world they claim to represent. This complacency has not yet been shaken, protected as it is by phalanxes of platitudes, but I hope that there are a few nervous glances being turned towards the world outside their double glazing and wrought iron gates.

By way of illustration, there is a good piece by Andrea Teti in Open Democracy about the Italian regional elections.
... the greatest surprise of all has been the performance of the MoVimento 5 Stelle (Five Star Movement, or M5S) led by figurehead Beppe Grillo, a political satirist and stand-up comedian. Polling at just above 5% a month before the elections, voters propelled it to a 15% national average, electing its first mayors, and even overtaking Berlusconi’s PDL in important heartland cities like Verona.

... The message that seems to emanate from all these polls is a resounding mistrust in and repudiation of ruling politicians, their methods, and their policies – austerity first and foremost. Traditional parties should beware the costs of ignoring it.
And before we disparage those who call for the reform of EMU as extremists, it is worth considering his conclusion.
The disappearance of the ‘old left’ over the past two decades has been the subject of extensive debates. The disappearance of traditional liberalism and of a moderately progressive agenda – one of the hallmarks of post-World War II European politics – has been less frequently noted.
This is a pan-EU crisis, a perfect storm consisting of domestic weaknesses, the fallout from the credit crunch and the flaws in European Monetary Union. Domestic change can achieve little unless both the banking sector and EMU are reformed as well. And that requires an intellectual shift, one that is being articulated by these 'far left' groups espousing the political economy of - er, Harold Macmillan.

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